“Game changer” for the sector: First cannabis company expected to list on LSE next month

Kanabo, an Israeli medicinal cannabis company, is expecting to become the first cannabis firm to list on the London Stock Exchange.  

On the condition that all FCA (Financial Conduct Authority) requirements are met, the company is expecting the IPO (initial public offering) to take place in February this year.

The company finished a two-week virtual roadshow [a series of presentations made to investors ahead of an IPO] on Friday.

Speaking to Cannabis Health, founder and CEO, Avihu Tamir revealed that the it had an over-subscription almost 300 percent higher than its £3.2 million target.

“Everyone was telling me ‘it’s not the US, it’s not Canada, people don’t understand cannabis here. British people are more cautious, more conservative, it will be more challenging’,” Tamir said.

“Perhaps the questions that were asked were different than the questions that you would be asked when meeting US investors – maybe the knowledge base was a bit lower, but other than that interest and the understanding of the potential of the market was totally there.

“Now, what we’re doing this week is sending emails to people to say sorry, but they can only invest half of what they were planning to.”

Kanabo founder, Avihu Tamir

Kanabo, based in Tel Aviv, has developed the world’s first medicinal cannabis vapourising device, which delivers a metered dose of cannabis extract.

Smoking cannabis flower is a popular administration method for those suffering with chronic pain, however it gives a different dose on every inhale which prevents medical professionals from accepting smoking as a medicinal delivery method.

Kanabo’s VapePod, which can deliver a metered dose has already had initial sales in a pilot in the UK and Germany. They are expecting that the CE mark for the second generation medical device will be given in the first or second quarter of this year.

In Israel, approvals for the device are in the final stages. The vapourising device, which ensures the controlled application of cannabis-based medicines, is approved for use in hospitals and the company has recently embarked on a clinical trial to demonstrate bioavailability and safety.

Up until recently, regulations surrounding the public listing of cannabis firms has been unclear. However, since the FCA released a set of rules in September 2020, cannabis companies were quick to set things in motion.

MGC Pharmaceuticals, which develops and produces phytocannabinoid medications, and Emmac, one of Europe’s largest cannabis firms, are also in the race to list on the stock market in 2021.

Tamir is confident, however, that Kanabo will be the first to hit the milestone.

“It’s more than reasonable that we will be the first, but I do hope we won’t be the only ones,” Tamir said.

“Part of pushing the industry forward is having more and I hope others, like MGC and Emmac, will join very soon.

“Once they [other companies] see the listing, they will start approaching the LSE. Suddenly the UK is a relevant market.

“There is a process of usually six months for doing the listing and the prospectus, so the next peak of companies coming into the LSE will probably be in six months to eight months’ time.”

Tamir believes the IPO (initial public offering) will be a “game changer” for the cannabis industry, which is predicted to be worth billions in Europe by the end of the decade.

“Once you have the public market in a certain country being opened up, you suddenly see the shift in how the cannabis industry is being perceived by decision makers,” Tamir added.

“Once you start to see these [cannabis] companies going to a public market, everything changes and the discussion is different; suddenly […] it’s a legitimate business, it is not a drug anymore. It is a medicine.

“We all know that alcohol and tobacco are not healthy, but they’re totally legitimised because it’s a business. And that’s the change; its the shift in the mindset of decision making. If they think of it as a public company, it’s respectable, it’s something real.”